I sent my RE agent an email early yesterday with a list of the six prospective properties that I may be submitting bids on today ot tomorrow. Upfront, though, I asked her again if she was confortable with me submitting multiple bids on a weekly basis, and if not, if she preferred I knock the offers down or submit on a more spread frequency. I also thanked her for her help. Here was her response:
Hi Steve,I'm thankful to have such an enthusiastic and understanding RE agent on my team. I still don't want to submit more than 6-7 offers in any one week, though - at least not until I get a property or two bought-and-sold through her. She understands my position (new RE investor wanting to start building an inventory), which I understand is hard for RE agents to absorb. I told my wife last week that the first property I by and sell via my agent's services, I would send a complimentary gift to her for her help (i.e., gift basket?).
Please be assured that this is what I do, this is what I love to do, and it's exciting to me to work with you in launching your real estate portfolio. Look at it this way: after you get going, things will slow down as far as submitting offers, but at this point you are trying to build a base before prices tick up for the summer selling season.
I also feel she is right about the frequency of offers slowing down after I get a couple under my belt. For one, the retail business requires a upfront funding that takes money out of your hands. Not a lot, but enough to limit the number of offers you can do. Also, once fall is in full swing, people tend to buy less houses as opposed to the spring and summer. I'm hoping I can get my wholesaling business to net me $5k-$10k per month to help offset a lot of the costs. Once I have cash reserves around $100k-$150k, I won't be worrying too much about limiting the frequency of offers, and I'll start submitting more again.
Possible Offers
My agent also gave me a rundown on the six properties I asked about. Here is the status with a revised offer on each:
Offer #1
Type: HUD
Status: On 10-day hold period.
Description: 2002, 3/2.5, 1952sf
List: $112,000
Repairs: $1,000
ARV: $134,000
My Sell Price: $129,000
My Offer Price: $103,750
Offer/List: 0.93
Offer #2
Type: HUD
Status: On 10-day hold period.
Description: 1980, 4/2.5, 1080sf
List: $75,000
Repairs: $15,000 (guess - still need to assess)
ARV: $85,000
My Sell Price: $84,000
My Offer Price: $47,500
Offer/List: 0.63
Offer #3
Type: VA
Status: No offers?
Description: 1997, 4/2.5, 2036sf
List: $121,000
Repairs: $1,000
ARV: $136,000
My Sell Price: $131,000
My Offer Price: $102,750
Offer/List: 0.85
Offer #4
Type: VA?
Status: Pending, but accepting backups.
Description: 1997, 4/2.5, 2623sf
List: $123,500
Repairs: $1,000
ARV: $132,000
My Sell Price: $129,000
My Offer Price: $101,500
Offer/List: 0.82
Offer #5
Type: REO
Status: Pending, but accepting backups.
Description: 1984, 3/2, 1601sf
List: $99,900
Repairs: $15,000
ARV: $117,000
My Sell Price: $112,000
My Offer Price: $72,500
Offer/List: 0.73
Offer #6
Type: HUD
Status: No offers
Description: 1982, 3/2, 1356sf
List: $95,000
Repairs: $5,000
ARV: $100,000
My Sell Price: $99,900
My Offer Price: $70,000
Offer/List: 0.74
2 comments:
Sounds like you have an agent that will work with you. Keep submitting offers! You may be surprised! I know I was yesterday when my offer was accepted.
Personally, I found REOs and VA properties to be a bit less flexible in the pricing. Of course, I've only made ten offers and I'm in Phoenix, which is really hot right now (there were almost 60 offers on one VA property I bid on), so that may be influencing my perception. I read somewhere that the VA won't take less than 85% of their listing price, but I don't know if that's true or not. Just throwing some information out there for you...
Thanks Shaun. My market area is slowly turning upward, though, it is going slowly. I think some banks are hesitant to lower their offers, while others are considering everything (based on my experience just last week).
My agent informed me that VA requires a 5% DP and roughly 5% in closing costs. The positive is they "only" have a 5.5% interest rate on their mortgage loans. The rate doesn't really matter a whole lot to me, though, as I'll be refinancing (and reselling) as quickly after the close as possible.
Phoenix today sounds a lot like Austin around 1998-2000. Sellers could name their price, and buyers would buy regardless of price. It was crazy. With the dot-com bust, things went south fast. We are just now starting to stabilize a bit.
Happy investing!
Post a Comment